Alternatives to Coles and Woolies (retail?)

[It's Snake Pliskin]

At one stage I was a supplier to woolworths. They have prospered on the back of their suppliers. They operate a cash business with high turnover but they are the slowest payers I ever encountered, sometimes about 80 days behind. I was in a high cost, low margin business so it was not profitable to continue to supply them. This is OK for them when there is a queue of potential suppliers but they have helped send a lot of local suppliers to the wall and now rely heavily on imports. They will not continue to enjoy the benefits of past trading methods. I suggest that they will continue to increase market share but with decreasing profitability. When I stopped supplying them I lost 30% of my business but increased my overall profit.
I also supplied Coles at the time and they were good to deal with. This was the reason Coles did not match Woolies. That is in the past. The future, I think, looks like Coles has room to improve, Woolies could have peaked.

An ethical investment?

Chops care to elaborate on what has been happening in Perth?

 

[It's Snake Pliskin]

The philosophical / ethical question of how the company makes that money is another question altogether . I suppose Woolworths would say that their responsibility is to deliver to their shareholders.

Hi Julia,

It should be to deliver a service to the community in an ethical manner with the intent of making a profit. (not to say that isn't happening)

Cheers

 

[chops_a_must]

As an ethical investment it seems they would not meet my criteria. I like to shop at coles anyway.

Chops care to elaborate on what has been happening in Perth?

Taking out live music venues to put those mega mart type bottle o's in. Nearly single handedly destroyed the Jazz society here as they were going to knock down their headquarters and the only place they play here.

Was really only intervention from the Culture and Arts minister that stopped it from happening in this case...

But yes, likewise, they are a big no no for me as an ethical investor.

 

[It's Snake Pliskin]

Taking out live music venues to put those mega mart type bottle o's in. Nearly single handedly destroyed the Jazz society here as they were going to knock down their headquarters and the only place they play here.

Was really only intervention from the Culture and Arts minister that stopped it from happening in this case...
But yes, likewise, they are a big no no for me as an ethical investor.

Jazz or alcohol? Give me Jazz.

Federal or state minister?

 

[chops_a_must]

Jazz or alcohol? Give me Jazz.

Federal or state minister?

The state.

There has been quite a groundswell of public opinion against the closing down and loss of local pubs here on shows such as stateline. But it's in WA's economic interest to keep pubs and live music, we need ways to attract and keep young people here, and not giving them anything to do, or anywhere to go is perhaps one of the worst things you can do.

 

[Julia]

Hi Julia,

It should be to deliver a service to the community in an ethical manner with the intent of making a profit. (not to say that isn't happening)

Cheers

I do take the point made by others about Woolworths (and I've heard the same said from people who have supplied Coles) making massive mark-ups on what they pay growers, and no, I don't like that.

But to be honest, and I imagine I'm typical of a lot of people, when I go to do the shopping, I know that if I go to Woolworths I will find well stocked shelves with excellent variety, high quality produce, and best of all, they understand the meaning of customer service. Nothing is a problem. If you don't like the mushrooms they have on display they will bring out another box.

So, Snake, I'd say they are providing a service to the community judging by the packed stores in contrast to the empty aisles at Coles. Voting with feet and all that.

To return to Dion's original question which I'm still assuming was asked from the point of view of making money, I'm not exactly unhappy with the 148% gain on my WOW shares, plus some dividends and franking credits.
After all, as we baby boomers are constantly being reminded these days,
I dare not risk falling into the dire position of costing the younger generations any welfare dollars so need to ensure my financial survival!

 

[It's Snake Pliskin]

So, Snake, I'd say they are providing a service to the community judging by the packed stores in contrast to the empty aisles at Coles. Voting with feet and all that.

(not to say that isn't happening)

From my previous post just to clarify.

 

[It's Snake Pliskin]

An article in the Telegraph today regarding coles:
http://www.news.com.au/dailytelegraph/story/0,22049,22455460-5001024,00.html

 

[DionM]

Wow this generated a bit of discussion.

My original intention I guess was wondering what other companies there are that operate in the same arena as Coles and Woolies, so I can build some diversity in my portfolio. I was - up until a year ago or so - mostly happy with my Coles shares.

But with all the takeover talk and bad news (esp the above quoted article, which was the driver for my post, I read something similar elsewhere yesterday) I want to look elsewhere in the sector.

Woolies is a good performer based on past history. But I don't know enough whether to know if I'm buying at the start of sideways movement (excluding the dip in August, it looked like the SP was starting to level off, but I'm not a great TA just yet).

And while I'm a long term investor, the dividend return is not spectacular (then again, not many in the industry are, it seems) either. I also only have the ability to buy a small parcel, so small gains in SP do not give me a big gain in value of shares) - hence my sensitivity (in part) to the cost of the shares and how many I get for my money.

So again, I wondered are there options to Woolies - hence my post.

With the ethical side of investing, I'm not sure about that either. I have some investments I've made (mostly in energy) that are guided by my concern for the world's health (climate change), but I don't know how passionate I am about big business vs small business and the like, as noted in the thread.